Law:

Section:

Arbitration Act, 1940 (X of 1940)-- ----S. 34--Stay of suit on the basis of arbitration clause in the agreement--Defendants did not submit any application for stay of proceeding at the earliest inspite of the knowledge of suit rather they made requests for setting aside ex-parte order passed against them and then for adjournment to file their written statement--Order of trial Court refusing to stay proceedings, upheld--Appeal dismissed. [P. 6] A & B PLD 1978 Q. 215; PLD 1981 SC 553; 1987 CLC 2205 & PLD 2006 SC 196, ref. Judgment This first appeal against Order No. 6 of 2006 has been filed by the Government of the N.W.F.P. and others against Khalid Khan and others. A suit was filed by Khalid Khan and six others against the Government of the N.W.F.P. the Conservator of Forest, Hazara Circle and three others for recovery of Rs. 11,39,250/- on the ground that the plaintiffs sustained losses due to non-sale of plants of the plaintiffs and misappropriation of the amount of the plaintiffs by the defendants. The defendants were served but they did not submit written statement, and after adjournments, filed petition for sending the matter to arbitrator in accordance with the agreement executed between the parties. 2. In fact the Defendants Nos. 4 and 5 were placed ex-parte on 23.10.2004, but an application for setting aside the ex-parte order was submitted by them on 22.11.2004. A reply to the same was submitted by the plaintiffs on 11.2.2005, but the ex-parte order was withdrawn on the said date. It was on 4.4.2005, the date of submission of written statement, that the defendants sought adjournment and further adjournment was requested for on 18.4.2005. Further adjournment was also granted to the defendants on 9.5.2005. 3. The main ground for dismissing the petition for sending the matter to the arbitrator was that the defendants had taken steps in proceedings and had not submitted application promptly. The adjournments requested for and granted to the defendants for submission of written statement were declared as steps taken by the defendants and it was held that the defendants had not taken up the issue of sending the matter to the arbitrator at the earliest…

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